An open market operation occurs when the__________ buys or sells securities _________.
A) Federal Reserve System; from or to the federal government
B) a commercial bank; from or to the public
C) Federal Reserve System; in the open market
D) a commercial bank; from or to the federal government

Question

Quizplus · Accepted Answer

An open market operation is when the Federal Reserve System buys or sells securities in the open market. This is a tool used by the Federal Reserve to control the money supply and interest rates in the economy. The Federal Reserve can buy securities to increase the money supply and lower interest rates, or sell securities to decrease the money supply and raise interest rates.

An Open Market Operation Occurs When The__________ Buys or Sells